WB Approves US$360m Loan for Towns

WB Approves US$360m Loan for Towns

The World Bank Board has approved a new loan to Uganda worth US$360m for the second phase of the Uganda Support for Municipal Infrastructure Development (USMID) project.

In an exclusive interview with The Sunrise, the Project Coordinator of USMID, Dr. Isaac Mutenyo, said the proposed extension of the project seeks to not only improve infrastructure development and revenue generation for municipalities but also create jobs for people.

“Just last week, the World Bank board agreed to lend the government US$360m on our project. It will be additional financing for USMID,” Dr. Mutenyo said. “One of the things that we would like to do under the new project is to focus a bit more on revenue generation and also on what is called local economic development. We want to create jobs for people.”

Mutenyo added: “We are thinking of doing a bit more than we’re doing on revenue generating infrastructure. We are thinking of having cottage industries.”
He said a municipality could identify an area where it would want to start a cottage industry then USMD could service that area by providing water and electricity to encourage the private sector to go and start businesses there.

“The urban authorities would be able to raise revenue from taxes on the one hand, and people would get jobs pay tax,” Mutenyo added.

Dr. Mutenyo said the new project will initially target the 14 municipalities that benefited from the first USMID project. These are Arua, Gulu, Lira, Soroti, Moroto, Mbale, Tororo, Jinja, Entebbe, Masaka Mbarara, Kabale, Fort Portal and Hoima.

Besides the 14 municipalities, the project will add four new municipalities in the first year before adding another four in the second year of implementation. All this however is pending approval of the loan by Parliament.

The first four municipalities to be added to the 14 will be determined on the basis of regional balancing with the East, North, Central and West getting one additional municipality with the highest population.

Mutenyo said that the goal behind USMID’s activities in urban development is to partly reduce the exodus of people towards Kampala by ensuring that the up-country towns are more liveable and attractive to investors.

“The reason why Kampala and Wakiso are congested is simply because there is only one city. People move all the way from Arua to Kampala simply because all facilities are here; the government facilities, the best doctors,” Mutenyo said.

“In order to prevent people from coming to Kampala, we need to create another Kampala in Arua, Jinja and Mbale and so on so that you remove any reasons why people should move to Kampala. If you want a good doctor, engineer you will find them there,” Mutenyo added.